Gitcoin Grants Analyses

As requested in a gitcoin grant itself, I want to take a look at the data of Gitcoin grants since the program's creation in November 2017. I hope to elicit some novel information from the data on how quadratic funding has looked so far, and how we might compare it to other systems of funding these sorts of projects.

Background

Gitcoin is a program to crowd-fund open source projects by using cryptocurrencies and quadratic funding. The idea is a twist on quadratic voting which enables democratic participants to not only indicate their preference, but also their level of preference.

Data Exploration and Cleaning

Let's take a look at the basic data sets we've got from the grant that spurred this analysis, utilizing the handy pandas_profiling tool.

Data Analysis

Let's take a look at couple things that you'd probably expect to be true generally about the data. Some of these hypotheses and their corresponding conclusions will probably elicit a "well, duh", but it never hurts to be sure. It can also reveal some areas that we can look further into.

Funding Over Time

Let's see a few macro trends as the Gitcoin program has grown.

Total funding amounts were on a fairly slow, linear growth until round 8 had an explosion of crowdfunding. This retracted a bit, then turned into a bit of an exponential curve. I'd suspect that matching amount likely has a strong correlation with how much individual contributors are willing to kick in, but that doesn't seem to be the case, at least not until round 12. We're going to dig into this later, but for now I wonder if the rising ETH-USD price made people more generous? Let's map the total funding amounts against the USD price of ETH (courtesy of CoinDesk).

It seems that, while the ETH-USD price is maybe not causing the Gitcoin funding to increase at a similar rate, it certainly is correlated. This doesn't quite explain that dip in total funding after week 8. Perhaps that initial pop of sending ETH to $500+ drove excitement that later tapered off into "the new normal"? I imagine a lot of people got excited for some reason. I'm not sure WHY, but we can use Google trends to get some idea of how popular Gitcoin was at different periods of time.

Gitcoin Google Trends

Well that doesn't really match up. Google trends shows the Gitcoin term getting big in early June, 2021. That would be around the beginning of Round 10, which raised a total of $1,733,505.44. Google trends is probably an imperfect tool for something like this, but that huge spike is perplexing. Perhaps there was a major press push around then? I tried comparing the terms Ethereum and Gitcoin side-by-side, and Gitcoin barely registered. Either way, we'll have to dig more into the latest round, round 12, which shows a gigantic spike in all metrics. My bet is on the massive amount of matching money that was being offered.

Feast or Famine?

A lot of projects are getting very little to no funding, with almost 20% total showing $0 raised, and plenty more showing very small sums of money. Let's look at how much of a disparity there is among these projects, and how things have changed over time. For this analysis, we'll consider any total raised under $10 to mean little to no funding. The world being as it is, $10 USD will go a lot further for you in India than it will in the U.S.A., but you'd have a hard time sustaining an individual (or a team for that matter) for much longer than a couple days anywhere for that amount. So we'll treat $10 as a cutoff. Other ranges are chosen a bit more arbitrarily.

Well that's interesting. It seems that the first Gitcoin rounds were fairly high in funding, with large portions of projects receiving more than $1,000 in funding. As the `Total Amount of Grants` experiences sharp increases, the funding distribution shifts dramatically with lots of projects receiving little funding. This seems like a simple conclusion that if there are more projects to choose from, a lot of them get lost in the mix and receive little funding (see rounds 6 and 12). As a user personally, I would be much more encouraged to donate money to a project that already has a decent amount of money allocated to it, meaning that my funds have a smaller chance of going to "waste". If I see a project has only raised $5 after a few days of funding, it's easy to imagine the project's creators being discouraged and abandoning the project, and donating an extra $10 to bring their total to $15 (ignoring matching) is unlikely to change that narrative.

I wanted to compare this trend to other charity grant systems, but couldn't find any that really emulate the approach that Gitcoin has. The best I could find is a FiveThirtyEight analysis on long-shot Republican candidates fund raising for 2020 campaigns in the U.S. I think political candidate fundraising has some equivalencies to the Gitcoin system.

The results of Republican candidate fund raising look pretty similar to the Gitcoin rounds: as more enter the race, fewer receive significant funding. It's obviously a flawed comparison (charity isn't winner-take-all like politics, politics tends to be more anger-driven, etc) but I think it shows that similar systems get similar results.

In order to confirm this suspicion and dig deeper, I'd need more granular data on how grants are funded over time. I'd also like to see if there are any other similar charity models to compare against.

What about the projects that earned the most? And how does the amount of rounds you participate in correlate with the total funding you've received?

At first, I would say that the weak correlation between Number of Rounds Present and Total USD Raised would be surprising. But with how many new grants were started in Round 12, and the huge amount of funding Round 12 had shows that recent grants had a much better chance of getting big money.

Overall Lessons Learned

Round 12 Specific Lessons

Avenues Worthy of Further Exploration